What Is Dismissal Based on Operational Requirements

It is common knowledge that employers use layoffs due to operational requirements as camouflage for what is actually a layoff due to misconduct or incapacity – the work of the lost employee suddenly becomes superfluous, or the work of the employee who is malfunctioning suddenly becomes superfluous. The third part of our series of articles on fair dismissals in the workplace should be the second part of “Dismissal due to incapacity for work or poor performance at work”. However, due to the COVID-19 pandemic, which will inevitably have a lasting and far-reaching impact, not only on the health system and the population of our country, but also on the economy and employment, we consider it appropriate at this stage to address the last reason for fair dismissal: restructuring in a workplace may require changes in working and employment conditions in certain circumstances. If an employee refuses to accept the changes necessary to meet the company`s operational requirements, the dismissal is justified. What are the fair and objective selection criteria for dismissals that are based on the employer`s operational requirements within the meaning of Article 189 para. 7 LRG? Our Labour Pro product and services focus on work-related solutions, and our Labour team has both the ability and ability to unpack and resolve all scenarios associated with cuts, allowing the employer to avoid legal pitfalls that can result from unfair dismissal or due process failure. When employers consider laying off employees based on their operational needs, they comply with section 189 or section 189A of the Industrial Relations Act No. 66 of 1995 (LRA). The tribunal concluded that employees must be selected according to fair criteria and appropriate consultation. The process of requiring employees to apply for jobs through a restructured process was accepted as legitimate. However, this strategy is not without risk for the employer – the selection criterion then effectively becomes the employee`s failure to be hired or to apply for a new job.

If selection for jobs is based on vague or subjective criteria, the dismissal crosses the line from a “not guilty” dismissal to a performance-related dismissal. Remember that at the time of publication of this article, the full impact of the COVID-19 pandemic is not yet known. Employers are encouraged to maintain the cuts as a last resort and contact a lawyer before taking steps to ensure that, in addition to a difficult financial period, businesses are not penalized by a wave of unwarranted dismissal and CCMA bonus lawsuits against employers who acted too quickly when it came to: dismiss an employee due to operational requirements. Although formulated in procedural terms, the purpose of Article 189 is substantial. It aims to preserve jobs and, if jobs cannot be preserved, to ensure that all processes that lead to job losses are fair and that the negative effects of job losses are mitigated. According to § 213 LRA, “operational requirements” are defined as “requirements based on the economic, technological, structural or similar needs of an employer”. The Code of Good Practice: Termination Based on Operational Requirements, as set out in the LRA, further clarifies in point 1: Section 213 of the Industrial Relations Act, 66 of 1995 (“the Act”) defines “operational requirements” as “requirements based on the economic, technological, structural or similar needs of an employer”. As a rule, economic reasons are those related to the financial management of the employer (it can be an individual or a company). It is important to remember that it is not the cause (currently the COVID-19 pandemic) that determines whether a layoff of operational requirements is applicable, but its impact and/or impact. In the case of the COVID-19 pandemic, the impact at this stage will be more immediate on the hospitality and tourism industries, but will inevitably affect almost every industry in South Africa.

The criteria for selecting workers for dismissal on the basis of the company`s requirements must never infringe a fundamental right recognised by law, as it automatically renders such dismissal unfair. Selection criteria, which are generally considered fair, include seniority, skills and qualifications. In general, the test is met on fair and objective criteria according to the “Last in First Out” (LIFO) principle. This means that the decision to withdraw is the last decision made in the process, not the first decision. The judgment goes on to state: “This requirement is essentially formal or procedural, but has a substantive objective. This objective is to ensure that the final decision on the reduction is duly and genuinely justified by operational requirements or, in other words, by commercial or commercial justification. It should be noted that employers, that the reference in the above decision to “employees who do not meet the employer`s operational requirements” does not refer to employees whose work performance does not meet the standard. Such cases clearly fall within the scope of disability, and there are other procedures to resolve these issues. The first step in the process is therefore to receive a notification of cuts.

This includes all relevant details, including the reason for the termination, the number of employees, severance pay, etc. Then, all affected employees will have the opportunity to provide feedback and consult with the employer about the cuts. This can be done in writing or in person. Once the criteria have been established on how they will decide who they want to fire, selected employees will receive a notice of dismissal. Sometimes employers try to use the excuse of “operational requirements” when they simply want to get rid of an employee. Employers who do so could face penalties from the CCMA if the employee decides to take legal action. The objective of the procedure provided for in Article 189 is to ensure that the detention decision is appropriately and seriously justified by operational requirements. Tips: Termination due to the employer`s operational requirements must be carried out in accordance with the strict provisions of the LRA. Unlike dismissals due to misconduct or poor performance, layoffs (cuts) for “operational needs” are “not culpable layoffs,” meaning that the employee did nothing wrong. These are due to the economic, technological, structural or similar needs of the employer – as we have seen with the massive cuts in the banking sector. New technologies mean that some jobs are no longer needed, and traditional workers are being reduced due to technological change. .